Treasury lowers 2026 growth forecast and announces temporary fuel-levy relief

Finance Minister Enoch Godongwana lowered the forecast for real economic growth in 2026 to 1.2% in the Medium-Term Budget Policy Statement on 21 October 2026. The February projection was 1.6%, making the revised forecast 0.4 percentage points lower.

The statement also announced temporary reductions in the fuel levy for petrol and diesel. Their size changes during the relief period, making the dates and rates relevant to businesses assessing fuel-related costs.

Fuel-levy reductions and timing

From 4 November to 1 December 2026, the levy reduction will be R3 per litre for diesel and R1.50 per litre for petrol. Reduced relief will then continue through 5 January 2027, at R1.50 per litre for diesel and R1 per litre for petrol.

The announced levy reductions give fuel-using businesses a dated measure to consider in cost planning. They do not, on their own, establish how any individual firm’s total costs will change.

Cost and funding

The government said the temporary relief would result in R10 billion in foregone revenue. It said the measure would be funded by returning R10 billion previously transferred to the Central Energy Fund to the National Revenue Fund.

For business planning, the lower growth forecast provides a revised economic baseline, while the fuel-levy announcement sets out a temporary measure with specified rates and an identified funding source.